Insight-Driven Retailing Blog

Did Carol Brady really have it that bad? She had no job, yet she had a full-time live-in housekeeper, Alice. I wish we had an "Alice" that would keep the pantry full. I once complained to my wife that we were out of cereal yet again and proceeded to explain to her how to manage our "food inventory." She stomped out of the house and returned with every box of Special K that our grocery store carried. It took me a long time to eat all that cereal. There's got to be an easier way.

There is. Alice.com is a new website that sells household items like soap, stamps, toothpaste, and cereal. Alice has a few unique things going for it too. First of all, its billed as a way for manufacturers to sell directly to households. Retailers have been creating generic brands for years, so why not let manufacturers sell directly to consumers? Turn-about is fair play.

Alice.com doesn't mark-up the products either. It manages the warehouses, runs the e-commerce site, and handles the shipping, which is free by the way. They also check for coupons that can be automatically applied, and provide price comparisons with other popular sites. They track the products you buy, and remind you when they should be running low based on usage patterns. Alice doesn't make you buy in bulk, but you are required to buy at least 6 items per shipment.

So how do they make money, you ask? Advertising and coupons. Seems like a risky business model to me, but since the founders are serial entrepreneurs Brian Wiegand and Mark McGuire, I think its in good hands.

I created an account and searched for breakfast bars. 16 options were available as well as 7 coupons. Quaker Oatmeal-To-Go Bars are $3.39, and according to Alice, they are $4.19 at Amazon Fresh. Not bad.

We'll have to keep an eye on this venture.

One of the hyped technologies of late is augmented reality, and it maybe the next killer-app for smartphones. You've seen augmented reality (AR) before, but probably don't realize it. The yellow first down line shown on TV during American football games is an example. Highlighting the puck during hockey games is another. Heck, they're sticking advertisments on the field of play nowdays. Soon they'll be painting halftime streakers for our entertainment.

When we think of mashups, we typically envision a map with data from multiple sources overlayed, like home prices, square footage, and tax assessments (eg Zillow). Now replace the map with, well, the real world. Aim your smartphone's camera at a landmark, and see information about the landmark overlaid on the screen. Slowly pan, and see the data change in real-time. Companies like Mobilizy and Layar are using the GPS in your phone to determine your position, then they use the accelerometer as a compass to determine where you are pointing your phone's camera. Then voila, data is overlayed on the camera's image so while you're looking at Big Ben you can learn about its history. Or you can pan the cityscape looking for the nearest ATM.

Its a little hard to explain, so check out both company websites mentioned above for videos that demonstrate the technology.

Perhaps this technology will someday be used to help locate stores, offer additional information on billboards and shop-fronts, or maybe even in-environment advertising (follow the link for a very cool video). Things get especially interesting when you layer on the time dimension so that the landscape doesn't necessarily have to be static. Or possibly add object recognition (follow the link for a very cool video).

The future of computing is your mobile phone.

I attended Oracle Retail's user conference, CrossTalk, in Orlando and had a great time. What really made it different from past conferences was its focus on the retailers themselves. It was refreshing to not have to talk about roadmaps and instead listen to the retailers talk about the economy, their implementations, and their customers.

I took the opportunity to talk about a few things that have been covered in this blog, such as:
The use of coupons on cell phones
Competing in 2009
Best Buy's Web 2.0 Projects

If you'd like to read some of the coverage of the event, listed below are some links:
David vs. Goliath: Oracle OpenWorld Vs. CrossTalk
Retail TouchPoints Corner Office Conversation
Crosstalk on the Business Value of IT: Giving Oracle Retail its ‘Props’

My friend Dan Conway, a retail trivia buff, sent me the following:

In June 1974, one of the first UPC scanner, made by NCR Corp. (which was then called National Cash Register Co), was installed at Marsh's supermarket in Troy, Ohio. On June 26, 1974, the first product with a bar code was scanned at a check-out counter. It was a 10-pack of Wrigley's Juicy Fruit chewing gum. The pack of gum wasn't specially designated to be the first scanned product. It just happened to be the first item lifted from the cart by a shopper whose name is long since lost to history. Today, the pack of gum is on display at the Smithsonian Institution's National Museum of American History.

The humble bar code turns 35 this month. A collection of black stripes on merchandise sold over retail counters has changed the world. The most obvious benefit of bar coding is that consumers need to spend less time at check-out counters, waiting for their bills to be manually prepared. These days, it takes a few swipes over a bar code reader to do the trick. Bar coding has helped retailers and manufacturers keep a close eye on sale patterns in real time, knowing exactly when to stock up or run down inventory. That has led to a radically new world of efficient supply chains and tight inventory management.

Bar code standards are now managed globally by GS1, which was formed from the Uniform Code Council (UPC Code) and EAN (European Article Numbering). They are pushing a new standard called the DataBar that contains more information. Databars can hold data on expiration dates, lot numbers, and variable weight information. This will make checkout more accurate, especially at grocery stores. GS1 has a video that explains the DataBar's value.

The goal was to have everyone using DataBars by January 1, 2010 but that date was recently extended to 2014. Many retailers, especially grocery stores, can handle both old UPC and new DataBar codes with updated hardware.

My ten year-old son's friend stopped by the other day wearing a Hollister shirt. Fashion seems to start earlier than when I was a kid. I remember wanting "Op" clothes when I was 13. While same-store-sales have been down for Abercrombie & Fitch, parent of Hollister, they are still top-of-mind with teens and young adults. And that demographic still tends to spend money on "mall fashion" regardless of the economy. A recent Scarborough Research and Arbitron Inc. study reported that 62% of teens visit malls as often or even more often than they did six months ago, with about 40% saying they spent about the same amount of money.

Recall my previous (and first) visit to a Hollister store. Now in addition to their new Oracle Retail POS, they are also implementing Oracle's merchandising. Kristen Blum, Senior Vice President and CIO, Abercrombie & Fitch said:

There is no question that our strategic relationship with Oracle Retail is delivering meaningful value to our business and will take on an increasingly important role as we move forward with our strategy and key growth initiatives. Oracle Retail not only provides us with industry-leading, best practice applications and technology, but they have partnered with us across the board to get maximum value out of the systems as we aggressively drive our business strategy.

I don't normally cut&paste other people's blog postings, but this one is perfect as is...

Zappos is known for service…and for letting their service agents “be themselves”. I put this to the test tonight and threw a curveball or two at the guy helping me in a Live Chat. I used the name “Timmy” as my alias and asked a totally random question about a random product. See actual chat log below. Zappos rocks! I could not even make this stuff up, I swear.
–
You are now chatting with Jonathan
Jonathan: Hello Timmy. How can I help you?
Timmy: do you know how wide the G-Shock Atomic Solar - AWG101 SKU #7403774 is?
Timmy: i mean, how big a wrist it would fit?
Timmy: Timmy has a big fat wrist
Timmy: Timmy need watch grande
Jonathan: I’ll see what I can find out for Timmy.
Timmy: awesome. and can we please continue to talk about Timmy in the 3rd person? Timmy likes to boost Timmy’s ego by talking about Timmy that way
Jonathan: Jonathan would be happy to neglect the use of pronouns for the duration of this conversation.
Timmy: Jonathan and Timmy shall get along just fine
Jonathan: Will Timmy be able to measure Timmy’s wrist?
Timmy: Timmy’s wrist is big, but not Biggie-Smalls big. Timmy doesn’t have the required measurement instruments.
Timmy: Timmy is 6′4″ 220lbs if that helps Jonathan
Jonathan: Luckily, that is roughly the size of Jonathan’s brother, so that does help.
Jonathan: Jonathan thinks that this watch will work out well for Timmy. The watch’s circumference is 9 inches, so it will probably fit around Timmy’s wrist.
Timmy: Ok cool
Timmy: Do your watches and stuff have free return shipping like your Zapatos?
Timmy: in case Timmy wants another one or something
Jonathan: And if it doesn’t work out, as long as the watch is in its original condition and in the original packaging, Timmy has 365 days to return Timmy’s order. We will even pay for the return shipping! As always, our shipping to Timmy will be free.
Timmy: Timmy thanks Jonathan for good help
Jonathan: Jonathan welcomes Timmy.
Jonathan: It’s Jonathan’s pleasure!
Jonathan: Can Jonathan do anything more for Timmy?
Timmy: no that is all timmy needs
Timmy: timmy happy
Jonathan: Good. Does Timmy have an account se up with Zappos yet?
Jonathan: Jonathan will upgrade Timmy’s account.
Timmy: yes timmy is repeat shopper
Timmy: but “Timmy” is my alter ego and not my actual name
Jonathan: Well, what is “Timmy’s” email address? I’ll hook you up.
Timmy: Timmy has placed orders using txxxxxx@gmail.com in the past
Jonathan: Alright TODD!
Jonathan: :)
Jonathan: I’m going to upgrade your account to VIP status! This will ensure that all future orders go out with 1-business day shipping free of charge!
Just place your future orders at http://vip.zappos.com.
Timmy: Timmy Likey!
Jonathan: Good. Good…
Jonathan: Let Jonathan know if there is anything else that Jonathan can do for Timmy.
Timmy: Ok, Timmy ok now. Timmy time to go shopping!
Jonathan: Have fun!

Original post.

Larry Ellison spoke at JavaOne 2009, and a video replay is embedded below. If you can get by the jokes, you'll hear that Oracle is excited about JavaFX and the possibility of NetBooks.

Following my criticism of m-commerce, I thought I'd talk about a more promising use of mobile phones for retail. If you're like me, you loath to cut coupons, but they are a great way to save money. They're also an excellent way for manufacturers and retailers to entice new consumers, so its a win-win. Just as some airlines now allow boarding passes to be downloaded to phones and scanned at the gate, grocers like Kroger, Randalls, and ShopRite are using mobile phones as coupons.

Companies like Samplesaint and Cellfire let consumers select the coupons that interest them, then download them to their mobile phone, usually via an application or or a text message that links back to the website. Then at checkout the consumer hands the phone to the cashier and the coupons are scanned.

According to Jupiter Research, nearly three billion mobile coupons will be issued to mobile users and just under $7 billion discounts redeemed by 2011.

Its easier to search for coupons, no need to clip them, redemption is simple, and no paper is wasted. Sounds good, right? Well it could be better. Seems to me that handing over my phone while the cashier scans the coupons could be time consuming, especially since phones vary so much. Cashiers will need to know how to scroll down for each coupon on different types of phones.

According to the Cellfire website, there's also an option to associate the coupons with your loyalty card. Now we're talking! One swipe of my card and my coupons are redeemed, my discounts are applied, and in some cases, I get points awarded. Now that's efficient.

I get using my mobile phone to buy ring-tones, games, and maybe even movie tickets, but a New York Times article posted the following question: would you be comfortable using your phone to purchase big-ticket items?

Comfortable in terms of security? Sure; I think security has come a long way. But why would I since its so much easier to use a PC (or a Mac) with a wide screen and a keyboard that has a dedicated key for every letter in the alphabet? The article references research sponsored by Billing Revolution, a mobile payment provider, and includes some quotes from their co-founder, Michael Dulong.

Dulong: “If I could save myself a trip to Home Depot on Saturday using my mobile phone, I would be single-clicking myself to a frenzy.”

Seriously? Why would anyone use their mobile phone to buy from Home Depot? I might use their e-commerce site to buy things not stocked in the store, but not from my phone. I think purchases on the phone will be about "living in the moment." Things that I need now, not things that will be shipped to my house in a few days.

Dulong: “What if you could order a CD and T-shirt from the concert you’re attending and have it shipped to your home, without even going to the concession stand? That’s big.”

Not really. Again, if its going to be shipped to my home I'd rather wait until the morning and order it using my PC. Now if I could easily order it on my phone, skip the long line, and pick it up immediately then I'd consider it. Again, m-commerce purchases are about immediate gratification.

Now don't mistake my critical eye for a dislike of m-commerce altogether. I think mobile phones are great for product comparisons, research, payment, product location, etc. I just think purchases via mobile phones have limited value. Am I wrong here?

You may not have noticed, but CircuitCity.com relaunched on May 19th under new management. Systemax bought the Circuit City website for $14 million in cash plus a share of future revenue over the next 30 months. When CompUSA was close to bankruptsy, Systemax bought their website and 16 stores for $30 million back in 2008. Systemax now operates both websites in addition to TigetDirect, a popular website for consumer electronics.

Can Systemax breath new life into Circuit City as they did with CompUSA?

I toured the site a bit and it seems to be a combination of the old Circuit City and Tiger Direct websites. I assume that all three e-commerce sites are powered by the same supply chain, so their products and prices should be similar. Since I just ordered a Garmin Nuvi 205W GPS (from Kmart for $80), I thought I'd check its price at the three Systemax sites. CircuitCity.com and CompUSA.com had the same listing at $140, but TigetDirect.com did not carry it. All three sites offer similar product information and promotions.

I'd guess that Systemax is already heavily invested in its CompUSA stores and the Retail 2.0 theme, so I doubt the Circuit City stores will be resurected. Nonetheless, I think the Circuit City brand is in good hands since Systemax has a strong record of turning acquisitions around.